Five leading export sectors: FBR reduces WHT to one percent for manufacturers

The Federal Board of Revenue (FBR) has reduced withholding tax (WHT) from five percent to one percent on the imports made by the five leading export sectors. In this regard, the FBR has issued a notification here on Thursday.
According to the notification, the tax under Section 148 of the Income Tax Ordinance 2001 shall be collected at the rate of 1 percent in case of manufactures and 3 percent in case of commercial importers covered under Notification No SRO.1125(I)/2011 dated December 31, 2011".
Through SRO.212(I)2013, the FBR has drastically cut withholding tax on five export-oriented sectors -textile, leather, surgical, carpets and sports. Recently, the Board has imposed 2 percent sales tax on five top export sectors from March 1, 2013 through amendment to SRO.1125(I)/2011. It was unjustified to simultaneously impose 2 percent sales tax as well as five percent withholding tax on textile, leather, surgical, carpets and sports industries. In order to provide relief to the sectors, the FBR has reduced withholding tax on the sectors by 4 percent.
Following is the text of the notification issued on Thursday: SRO 212(I)/2013.- In exercise of the powers conferred by sub-section (2) of section 53 of the Income Tax Ordinance, 2001 (XLIX of 2001), the federal government is pleased to direct that the following further amendment shall be made in the Second Schedule to the said Ordinance, namely:-
In the aforesaid Schedule, in Part-II, after clause (9B), a new clause shall be inserted, namely: "(9C) Tax under section 148 shall be collected at the rate of 1 percent in case of manufactures and 3 percent in case of commercial importers covered under Notification No SRO.1125(I)/2011 dated the 31st December, 2011".